Dominion Announces 2001 Operating Earnings of $4.17 Per Share.Business Editors RICHMOND Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. , Va.--(BUSINESS WIRE)--Jan. 24, 2002 Dominion dominion, power to rule, or that which is subject to rule. Before 1949 the term was used officially to describe the self-governing countries of the Commonwealth of Nations—e.g., Canada, Australia, or India. -- Company provides earnings outlook and guidance for 2002 to 2004 -- Conference call scheduled for 10:00 a.m. ET today Dominion (NYSE NYSE See: New York Stock Exchange : D) announced today unaudited consolidated operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the 12 months ended December December: see month. 31, 2001 of nearly $1.1 billion ($4.17 per share), compared with earnings of $787 million ($3.33 per share) in 2000. Operating earnings for 2001 exclude special after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charges of $97 million (38 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) resulting from Dominion's estimated Enron Enron A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh exposure; $136 million (54 cents per share) related to the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of power purchase contracts and non-utility generating units previously serving the company under long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. contracts; $25 million (10 cents per share) associated with the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of Saxon Saxon Any member of a Germanic people who lived along the Baltic coast in ancient times and later migrated west as far as the British Isles. The Saxons became pirates in the North Sea during the decline of the Roman empire, and in the early 5th century they spread through Capital Inc.; $68 million (27 cents per share) in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. associated with a senior management restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). initiative announced in November November: see month. and other restructuring costs; and $183 million (73 cents per share) from a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of Dominion Capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) . Operating earnings for 2000 exclude special after-tax charges of $198 million (84 cents per share) in restructuring and merger-related expenses; $187 million (79 cents per share) associated with the write-down of Dominion Capital assets; as well as after-tax gains of $13 million (6 cents per share) from the sale of Corby Corby, town (1991 pop. 48,704) and district, Northamptonshire, central England. Situated over one of the world's largest ironstone fields, Corby has grown rapidly since the 1930s, when new techniques of steel production were developed. Power Station and $21 million (9 cents per share) from the cumulative effect of pension accounting changes. Reported net income for the 12 months ended December 31, 2001 was $544 million ($2.15 per share), compared with $436 million ($1.85 per share) in 2000. Selected 2001 highlights include: -- Added 2,617 megawatts of generation to existing portfolio, a 14 percent increase; -- Increased gas and oil reserves Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints. Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally 77 percent to 4.93 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. cubic feet equivalent; -- Added 48,725 new gas and electric franchise customers; -- Reduced debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. ratio from 61.6 percent to 58.9 percent; -- Restructured officer ranks, reducing the number of officers by 25 percent; -- Trained 125 Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. black belts and implemented Six Sigma company-wide. Thos. E. Capps, chairman, president and chief executive officer, said: "2001 was both challenging and rewarding. We are pleased to report solid results and reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our expectations for continued stable growth going forward during these difficult times. The ability to deliver solid financial performance in today's environment demonstrates the durability du·ra·ble adj. 1. Capable of withstanding wear and tear or decay: a durable fabric. 2. of Dominion's earnings power and the value of our integrated model." Full-year earnings breakdown by operating segment Dominion Energy, the company's electric generation and gas pipeline business segment, earned $723 million ($2.86 per share) in 2001, up from 2000 operating earnings of $489 million ($2.07 per share). Dominion Energy's results reflect the addition of a full year of Consolidated Natural Gas Company's (CNG CNG Compressed Natural Gas CNG Calling (Tone) CNG Comfort Noise Generation CNG Cryptography Next Generation (Microsoft Windows Vista) CNG Centre National de Génotypage ) pipeline operations, customer growth in the company's electric service area, lower capacity costs resulting from the termination of third-party generation contracts, a reduction in depreciation expenses resulting from the application for relicensing of the company's nuclear units in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). , and the acquisition of Millstone millstone Either of two flat, round stones used for grinding grain to make flour. The stationary bottom stone is carved with shallow grooved channels that radiate from the centre. The upper stone rotates horizontally, and has a central hole through which grain is poured. power station, partially offset by mild weather in the company's electric service area. Dominion Delivery, the company's electric and gas distribution and customer service segment, earned $366 million ($1.45 per share), compared to 2000 operating earnings of $339 million ($1.43 per share). Dominion Delivery's results reflect the addition of a full year of CNG's local distribution operations and customer growth in the company's service areas, partially offset by mild weather. Dominion Exploration & Production (E&P), the company's gas and oil exploration and production unit, earned $320 million ($1.27 per share) in 2001, up from $255 million ($1.08 per share) in the prior-year period. The increase is primarily attributable to the addition of a full year of CNG, the acquisition of Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. Dreyfus Natural Gas Corp. (Louis Dreyfus), and higher average realized gas prices, partially offset by higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Dominion Capital, the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. subsidiary, reported a loss of $14 million (6 cents per share) in 2001, compared to income of $11 million (4 cents per share) in 2000. Pursuant to regulatory agreements reached as part of its merger with CNG, Dominion has agreed to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. Dominion Capital. Suspension and sale of various operations had an effect on earnings; principally attributable to the lack of securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. gains following the sale of Saxon Mortgage and lower fee and interest income, partially offset by lower interest expense. Fourth-quarter earnings breakdown by operating segment Consolidated operating earnings for the fourth quarter ended December 31, 2001 were $231 million (89 cents per share), compared to operating earnings of $144 million (59 cents per share) in the fourth quarter of 2000. Fourth-quarter 2001 earnings exclude special after-tax charges of $97 million (37 cents per share) resulting from Dominion's estimated Enron exposure; $68 million (27 cents per share) in restructuring charges associated with a senior management restructuring initiative and other restructuring costs; and, $183 million (70 cents per share) from a write-down of Dominion Capital assets. Fourth-quarter 2000 earnings exclude special after-tax charges of $38 million (15 cents per share) in restructuring and merger-related expenses. Dominion Energy contributed $127 million (49 cents per share) to fourth-quarter 2001 operating earnings, up from $67 million (28 cents per share) in the fourth quarter of 2000. The change in Dominion Energy's fourth-quarter 2001 earnings is primarily attributable to customer growth in the company's electric service area, lower capacity costs resulting from the termination of third-party generation contracts, a reduction in depreciation expenses resulting from the application for relicensing of the company's nuclear units in Virginia, and the acquisition of Millstone power station, partially offset by warmer-than-normal weather in the company's electric service area. Dominion Delivery earned $93 million (36 cents per share) in its fourth quarter, up from $78 million (32 cents per share) for the same period in 2000. Dominion Delivery's fourth-quarter earnings reflect lower bad debt expense and lower operating costs operating costs npl → gastos mpl operacionales , partially offset by warmer-than-normal weather in the company's electric and gas service areas. Dominion Exploration & Production contributed $86 million (33 cents per share) to fourth-quarter 2001 operating earnings, up from $81 million (33 cents per share) in the fourth quarter of 2000. The change in Dominion E&P's fourth-quarter earnings is primarily attributable to higher production from Louis Dreyfus, partially offset by lower average realized prices. Dominion Capital posted operating earnings of $2 million (1 cent per share) for the quarter, compared to a loss of $1 million (1 cent per share) in the fourth quarter of 2000. Legal entity results While Dominion has restructured its daily operations as described above, assets remain wholly-owned by its legal subsidiaries, Virginia Electric and Power Co. (Virginia Power), Consolidated Natural Gas Company, and Dominion Energy Inc. (DEI), pending full implementation of electric and gas deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. legislation in the company's service areas. Operating earnings for Virginia Power, the company's electric utility, were $2.32 per share in 2001, compared to operating earnings of $2.41 per share in 2000. Operating earnings for CNG, the company's natural gas utility and exploration and production concern, were $2.00 per share in 2001, compared to 2000 operating earnings (since the Dominion/CNG merger closed January January: see month. 28, 2000) of $1.45 per share. DEI, the company's independent power and natural gas subsidiary, earned $1.24 per share in 2001, compared to 36 cents per share in 2000. Fourth-quarter 2001 operating earnings for Virginia Power were 17 cents per share, compared to 25 cents per share in the fourth quarter of 2000. Fourth-quarter 2001 operating earnings for CNG were 68 cents per share, compared to 42 cents per share in 2000. DEI earned 36 cents per share in the fourth quarter of 2001, compared to 10 cents per share in the fourth quarter of 2000. Earnings outlook and general guidance Dominion expects earnings of $4.90 to $4.95 per share in 2002 and then earnings per share growth at a compound annual rate of ten percent after 2002, which, for any single year, could range from high single-digit, year-over-year growth to low double-digit growth. Dominion has hedged about two-thirds of its expected 2002 gas and oil production at prices well above $3.00 per thousand cubic feet equivalent. Dominion has committed about 85 to 90 percent of its generation portfolio, consisting of about 70 to 75 percent committed to serve its franchise customer base, and an additional 15 percent sold to other customers. Dominion expects gas and oil production of approximately 450 billion cubic feet equivalent in 2002, and expects production growth to be in the 15 to 20 percent annual range over the following two years, as a result of two recent, significant discoveries, Devil's devil's pertaining to the devil; said of something evil. devil's apple solanumcapsicoides. devil's bit see scabiosa succisa. devil's droppings see asafetida. Tower and Front Runner front runner n → favorito/a front runner n (fig) → favori(te) front runner n (fig) → , as well as other exploration and development projects. Other drivers of earnings and cash flow growth in 2002 and beyond include an additional 10 months of earnings contribution from Louis Dreyfus, the acquisition of which closed in the fourth quarter of 2001, the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of goodwill amortization, growth in the company's franchise gas and electric service territories, growth in earnings contribution from the Dominion Energy Clearinghouse clearinghouse Institution established by firms engaged in similar activities to enable them to offset transactions with one another in order to limit payment settlements to net balances. , earnings contribution from new generation, lower interest rates, significant recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. savings from cost-cutting and the company-wide implementation of Six Sigma, which began in full-force this month with 125 fully-trained "Black Belts." In 2002, the positive earnings drivers are expected to more than offset the general decline in commodity prices. The resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of more normal weather patterns and the stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders of commodity prices are important assumptions for Dominion's outlook. Capps said: "Most investors do not fully understand the new Dominion. Beginning in 1998, Dominion began a transformation from a regulated electric utility holding company with strict limitations on its ability to produce attractive returns for its owners. Since then, Dominion has been dramatically transformed into an integrated energy company with the majority of its earnings effectively unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. . Over the past three years, Dominion has been reshaped into an entity with the single purpose of becoming the nation's premier energy company poised to deliver superior long-term value to its customers, owners and debt investors." Conference call for investors / media Dominion will host a conference call for investors at 10 a.m. ET, on Thursday, January 24. Dominion management will review fourth-quarter and full-year 2001 earnings to be released that morning. Members of the media are also invited to listen. Domestic investors who wish to participate in the conference call should dial 800-314-7867. International investors should call 719-219-0214. The confirmation number required to join the call is 533654. Participants should dial in five to 10 minutes prior to the scheduled start time. A live web cast of the conference call will be available on the company's investor information page at www.dom.com/investors. A tape recording of the conference call will be available from approximately 1 p.m. ET, January 24, through 11 p.m. ET, January 29. Domestic investors may access the recording by dialing 888-203-1112. International callers should dial 719-457-0820 to access the recording. The access code for the replay is also 533654. A replay of the conference call also will be available on the company's investor information page by the end of the day on January 24. Dominion is one of the nation's largest producers of energy, with a production capability of more than 3 trillion British thermal unit British thermal unit, abbr. Btu, unit for measuring heat quantity in the customary system of English units of measurement, equal to the amount of heat required to raise the temperature of one pound of water at its maximum density [which occurs at a temperature of 39. of energy per day. Dominion has a diversified diversified (di·verˑ·s and integrated energy portfolio consisting of 22,000-megawatts of generation, 4.9 trillion cubic feet equivalent of natural gas reserves, 7,600 miles of natural gas transmission pipeline and the nation's largest underground natural gas storage system with more than 950 billion cubic feet of storage capacity. Dominion also serves 3.8 million franchise natural gas and electric customers in five states. In addition, Dominion owns a managing equity interest in Dominion Fiber Ventures LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , owner of Dominion Telecom. For more information about Dominion, visit the company's web site at www.dom.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to various risks and uncertainties. Discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely, such as estimates of future market conditions, estimates of proved and unproved reserves and the behavior of other market participants The term market participant is used in United States constitutional law to describe a U.S. State which is acting as a producer or supplier of a marketable good or service. When a state is acting in such a role, it may permissibly discriminate against non-residents. . Other factors include, but are not limited to, weather conditions, economic conditions in the company's service area, fluctuations in energy-related commodity prices, trading counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit risks, risks associated with successfully executing the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. business plan and other uncertainties. Other risk factors are detailed from time to time in the company's Securities & Exchange Commission filings.
Dominion Resources Inc.
Preliminary Earnings Report - Operating Segments
December 2001
(millions, except earnings per share)
4th Quarter Ended 12 Months Ended
December 31 December 31
2001 (1) 2000 (2) 2001 (1) 2000 (2)
-------- -------- --------- --------
Operating Revenues &
Income $ 2,507 $ 2,782 $ 10,558 $ 9,246
======== ======== ========= ========
Earnings:
Dominion Energy $ 127 $ 67 $ 723 $ 489
Dominion Delivery 93 78 366 339
Dominion Exploration &
Production 86 81 320 255
Dominion Capital 2 (1) (14) 11
Corporate & Other (3) (77) (81) (342) (307)
---- ---- ----- -----
OPERATING EARNINGS
(EXCLUDING SPECIAL
ITEMS) $ 231 $ 144 $ 1,053 $ 787
======== ======== ========= ========
Special Items (see
Note 1) (348) (38) (509) (351)
REPORTED NET INCOME $ (117) $ 106 $ 544 $ 436
======== ======== ========= ========
Common Shares Outstanding
(average, diluted) 260.8 243.5 252.5 235.9
Earnings Per Share (EPS):
Dominion Energy $ 0.49 $ 0.28 $ 2.86 $ 2.07
Dominion Delivery 0.36 0.32 1.45 1.43
Dominion Exploration &
Production 0.33 0.33 1.27 1.08
Dominion Capital 0.01 (0.01) (0.06) 0.04
Corporate & Other (3) (0.30) (0.33) (1.35) (1.29)
------ ------ ------ ------
OPERATING EPS (EXCLUDING
SPECIAL ITEMS) $ 0.89 $ 0.59 $ 4.17 $ 3.33
======== ======== ========= ========
Special Items (see
Note 1) (1.34) (0.15) (2.02) (1.48)
REPORTED EPS $ (0.45) $ 0.44 $ 2.15 $ 1.85
======== ======== ========= ========
Note 1: Special Items
Pre-tax
Enron impairment $ (151) $ (151)
NUG buyout $ (220)
Loss on sale of Saxon
Capital, Inc. $ (40)
Restructuring &
acquisition-related
charges $ (105) $ (48) $ (105) $ (299)
Financial service asset
impairment $ (281) $ (281) $ (291)
Gain on sale of Corby
Power Station $ 11
Cumulative effect of
change in accounting
principle (pension) $ 33
After-tax
Enron impairment $ (97) $ (97)
NUG buyout $ (136)
Loss on sale of Saxon
Capital, Inc. $ (25)
Restructuring &
acquisition-related
charges $ (68) $ (38) $ (68) $ (198)
Financial service asset
impairment $ (183) $ (183) $ (187)
Gain on sale of Corby
Power Station $ 13
Cumulative effect of
change in accounting
principle (pension) $ 21
EPS impact
Enron impairment $ (0.37) $ (0.38)
NUG buyout $ (0.54)
Loss on sale of Saxon
Capital, Inc. $ (0.10)
Restructuring &
acquisition-related
charges $ (0.27) $ (0.15) $ (0.27) $ (0.84)
Financial service asset
impairment $ (0.70) $ (0.73) $ (0.79)
Gain on sale of Corby
Power Station $ 0.06
Cumulative effect of
change in accounting
principle (pension) $ 0.09
(1) 2001 results include Louis Dreyfus as of 11/01/01
(2) 2000 results include CNG as of 1/28/00
(3) Includes goodwill, interest and Corby Power Station
Dominion Resources Inc.
Preliminary Earnings Report - Legal Entities
December 2001
(millions, except earnings per share)
4th Quarter Ended 12 Months Ended
December 31 December 31
2001 (1) 2000 (2) 2001 (1) 2000 (2)
-------- -------- -------- --------
Operating Revenues &
Income $ 2,507 $ 2,782 $ 10,558 $ 9,246
======== ======== ========= ========
Earnings:
Virginia Power $ 44 $ 61 $ 587 $ 568
Consolidated Natural
Gas 177 102 505 343
Dominion Energy 94 24 312 85
Dominion Capital 2 (2) (14) 11
Corporate & Other (3) (86) (41) (337) (220)
---- ---- ----- -----
OPERATING EARNINGS
(EXCLUDING SPECIAL
ITEMS) $ 231 $ 144 $ 1,053 $ 787
======== ======== ========= ========
Special Items (see
Note 1) (348) (38) (509) (351)
REPORTED NET INCOME $ (117) $ 106 $ 544 $ 436
Common Shares Outstanding
(average, diluted) 260.8 243.5 252.5 235.9
Earnings Per Share (EPS):
Virginia Power $ 0.17 $ 0.25 $ 2.32 $ 2.41
Consolidated Natural Gas 0.68 0.42 2.00 1.45
Dominion Energy 0.36 0.10 1.24 0.36
Dominion Capital 0.01 (0.01) (0.06) 0.04
Corporate & Other (3) (0.33) (0.17) (1.33) (0.93)
------ ------ ------ ------
OPERATING EPS (EXCLUDING
SPECIAL ITEMS) $ 0.89 $ 0.59 $ 4.17 $ 3.33
======== ======== ========= ========
Special Items (see
Note 1) (1.34) (0.15) (2.02) (1.48)
REPORTED EPS $ (0.45) $ 0.44 $ 2.15 $ 1.85
======== ======== ========= ========
Note 1: Special Items
Pre-tax
Enron impairment $ (151) $ (151)
NUG buyout $ (220)
Loss on sale of Saxon
Capital, Inc. $ (40)
Restructuring &
acquisition-related
charges $ (105) $ (48) $ (105) $ (299)
Financial service asset
impairment $ (281) $ (281) $ (291)
Gain on sale of Corby
Power Station $ 11
Cumulative effect of
change in accounting
principle (pension) $ 33
After-tax
Enron impairment $ (97) $ (97)
NUG buyout $ (136)
Loss on sale of Saxon
Capital, Inc. $ (25)
Restructuring &
acquisition-related
charges $ (68) $ (38) $ (68) $ (198)
Financial service asset
impairment $ (183) $ (183) $ (187)
Gain on sale of Corby
Power Station $ 13
Cumulative effect of
change in accounting
principle (pension) $ 21
EPS impact
Enron impairment $ (0.37) $ (0.38)
NUG buyout $ (0.54)
Loss on sale of Saxon
Capital, Inc. $ (0.10)
Restructuring &
acquisition-related
charges $ (0.27) $ (0.15) $ (0.27) $ (0.84)
Financial service
asset impairment $ (0.70) $ (0.73) $ (0.79)
Gain on sale of Corby
Power Station $ 0.06
Cumulative effect of
change in accounting
principle (pension) $ 0.09
(1) 2001 results include Louis Dreyfus as of 11/01/01
(2) 2000 results include CNG as of 1/28/00
(3) Includes goodwill, interest and Corby Power Station
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